As part of administering the new transfer balance cap measure, the Australian Taxation Office (ATO) is currently developing a new self managed superannuation fund (SMSF) event based reporting regime. This regime is likely to be in the form of a report to be called the Transfer Balance Account Report or TBAR. At this stage, the reporting regime is expected to be as follows:

There is some good news and some bad news with the ATO’s release of Practical Compliance Guide PCG 2017/6. The good news is that spouses in receipt of death benefit pensions may commute their death benefit pensions in excess of the transfer balance cap back into accumulation before 1 July 2017. The bad news is that this concession does not apply to non-spouses and won’t apply after 30 June 2017.

In a welcome move, the ATO has announced that it will extend the lodgement date for 2015/16 SMSF annual tax returns to 30 June 2017

Well maybe not no news, but it will certainly be a relief to the super industry that the 2017 Federal Budget has largely left super untouched.

In April 2017, Sladen Legal’s Phil Broderick presented - Super reforms: What you need to do before 30 June 2017 for the Television Education Network.

In March 2017, Sladen Legal’s Phil Broderick presented - An overview of the super reforms – for the Television Education Network.

The Australian Taxation Office (ATO) has released Practical Compliance Guideline PCG 2017/5 which gives guidance as to how trustees of self managed superannuation funds (SMSFs) can commute pensions by 30 June 2017 in order to comply with the new transfer balance cap measure.

As a result of the commencement of the new super laws on 1 July 2017, Sladen Legal has prepared a number of document packages.

On 28 February 2017, Sladen Legal’s Phil Broderick, Melissa Colaluca and Rob Jeremiah gave presentations on the new super laws.

In February 2017, Phil Broderick of Sladen legal article was published “Units trusts and cost base resets under the TBC” in the Tax Institute’s Journal, Taxation in Australia.

With the new super laws commencing from 1 July 2017, advisors and trustees of self managed superannuation funds (SMSFs) are starting to consider whether they need to update their SMSF trust deed or their pension documents.

The ATO has released answers to frequently asked questions (FAQs) on the ATO’s safe harbour rules for related party limited recourse borrowing arrangement (LRBA) loans to super funds. The safe harbour rules are contained in PCG 2016/5 and have been discussed in a previous snippet. 

With that date fast approaching it is important that SMSF trustees look to rectify any outstanding related party non-commercial LRBA loans in the next couple of weeks.

There seems to be some confusion about the fate of transition to retirement income streams (TRIS). TRISs will not be abolished from 1 July 2017. Rather, they will no longer qualify for “pension phase” (or retirement phase under the new terminology). 

The new super laws are the biggest changes to super since 2007. Given that most of the measures commence on 1 July 2017, there are a number of planning matters to consider prior (and after) that date. 

One of the most significant consequences of the transfer balance cap is the effect it has on the payment of death benefits. This will affect all couples who have a combined superannuation balance of $1.6 million. 

Under the transfer balance cap measure market linked pensions (MLPs) are lumped with other defined benefit pensions. Defined pensions are treated differently to account based pensions given the inability to commute such pensions.

The transfer balance cap is the new limit on how much a member can have in their pension account and accordingly is a limit on how much a super fund can have in “pension phase”. Income and capital gains are tax free to the extent they are in pension phase. To the extent that a super fund is in “accumulation phase” its income is taxed at 15% and capital gains, on assets held for more than 12 months, are taxed at 10%. 

The headline items to this measure is that the non-concessional contributions cap will be reduced from $180K to $100K, the “bring forward rule” will be reduced from $540K to $300K and that members with account balances over $1.6 million will not be able to make non-concessional contributions. But like most of the new measures there are additional complexities to the new non-concessional cap measures.

The transfer balance cap measure includes a transitional CCT relief via a cost base reset. This relief is designed to ensure that only capital growth post the introduction of all of transfer balance cap (ie from 1 July 2017) is taxed. However, like all of the new measures the relief is complicated and requires careful consideration prior to 1 July 2017.